July 2014

According to the latest Rabobank report, Beef Quarterly Q2 2014, the global beef market will regain its positive momentum in Q3, once the current, temporarily high supply has worked through the system. This will likely support further strengthening of prices, as supply of competing animal proteins tighten. The main wildcards for the start of these positive developments are rainfall in Australia, and to a lesser extent the continued drought in US and Brazil pushing more cattle through the sys...

June 2014

Global poultry prices are taking off in Q2, according to Rabobank’s Poultry Quarterly Q2: Prices Taking Off report. This bullishness is driven by relative price support from high beef and pork prices alongside demand recovery and a more balanced supply and demand situation in most regions of the world. This is expected to lead to an improvement in profitability for the global poultry industry.

As anticipated, global dairy prices softened considerably through Q2. According to Rabobank’s Dairy Quarterly Q2: Beyond the tipping point, prices fell as a result of improved milk production in export regions and the easing of forward purchasing by China. These mechanisms freed more product for other buyers and lowered the need to ration demand with international dairy commodity prices falling 10% to 20% in the three months to mid-June.

New packaging and processing technologies are extending the shelf-life of fresh and processed meat. According to a new report from Rabobank, “Meat Packaging to Extend Shelf Life”, benefits include: expanded geographical sales coverage, better margins across the value chain, lower environmental costs of meat consumption and product premiumisation. While consumer preference for fresh over frozen to date has limited sales to mostly regional markets, this could now be changing. Expanding the targ...

Scotch whisky is currently enjoying a boom due to growing demand in the US and emerging markets. The industry is ramping up production to rebuild the declining stocks of longer aged whiskies. However, while production growth is warranted, a new report from Rabobank, “Now That’s Smooth” suggests that a smoother rate of production growth could help reduce the industry’s historic shifts between excess supply and shortages.

The global food industry is on the eve of an online retailing revolution that will lead to fundamental changes for players along the supply chain, from processors through to retailers. For brands and private-label food processors of every size it means exploiting opportunities and tackling the challenges of securing on-screen visibility. In its latest flagship report, “Food Processors Challenged by Online Growth Dynamics,” Rabobank looks at the growth of online food retail as a game changer f...

In the global spirits market, several surprises have emerged out of Asia in recent months according to Rabobank’s latest report Spirits Quarterly Q2 2014. China continues to surprise the industry, as initiatives to curb government extravagance that many believed would be short lived continue to weigh on sales of premium spirits. Looking beyond China the other surprises out of Asia have been Suntory’s acquisition of Beam in January and Emperador winning the bid to acquire White & Mackay.

May 2014

There is a deteriorating trend in the price of fertilisers and Rabobank expects this to continue in the coming quarter. China has exported significant volumes in its high tax season, and phosphate and urea prices will feel downward pressure as China exports even more in its low tax season. Fertiliser prices in the US will be under downward price pressure from fading demand; prices in Q1 were elevated due to supply chain bottlenecks and a compressed application window. For urea, there could be...

Pork shortages will be a key concern in many countries in the coming months. According to the Rabobank Pork Quarterly Q2 report, the ongoing spread of porcine epidemic diarrhoea virus (PEDv) in the Americas and Asia will have a material impact on pork supply both this summer and in the years to come. Exacerbating tight global supply is Russia’s ban on EU pork imports after recent African swine fever (ASF) outbreaks. However, oversupply in China is expected to continue, driven by high sow liqu...

April 2014

With local Chinese beef producers facing many challenges, domestic production is having a difficult time catching up with demand in China’s beef market. While the Chinese government is now providing some support, the gap in productivity between China and other beef-producing countries continues to widen. According to Rabobank’s latest report, China Beefing up Imports to Supplement Domestic Production, China will need to allow a substantial increase in imports in order to cover the supply gap....

Mexico’s economic growth is gradually improving, but food consumption remains vulnerable to income and price effects, according to a report from Rabobank – Mexico Agribusiness Outlook 2014: A positive year but full of challenges. The Mexican economy is expected to recover gradually in 2014, after a slow 2013, with Rabobank forecasting 2.9% growth, mostly occurring during the second half of the year. However, sector-specific challenges will continue to affect agribusiness. Grain and oilseed pr...

Both bulk and bottled wine exports from South Africa (SA), enjoyed strong growth in 2013, according to the latest Wine Quarterly report from Rabobank. The weak rand, coupled with rising bulk wine prices in other wine-producing regions, made SA wine more competitive and attracted new buyers who were impressed by the quality they found. Overall exports increased 26% in 2013. However, challenges remain and bulk and bottled wine suppliers will require different strategies to navigate the new mark...

Market fundamentals remain very positive for the global beef industry, according to Rabobank’s Q1 Beef Quarterly report. Firm demand as well as further tightening supply due to drought-induced herd retention in the US and some adverse weather conditions in Brazil and Australia—the three main beef exporters—pushed prices up across the globe in Q1 2014. Combined with fluctuating exchange rates, these events have impacted competitive positions in export markets, with Brazil and Australia gaining...

Porcine Epidemic Diarrhea Virus (PEDv) has impacted about 60% of the US breeding herd, 28% of the Mexican herd and is beginning to develop in Canada, according to Rabobank’s latest report This Little Piggy Cried P-E-D-v All the Way Home: Estimating the Impacts of PEDv in North America. If PEDv spreads in Canada and Mexico at the pace seen in the US, North American hog slaughter could decline by nearly 18.5 million hogs over 2014 and 2015 or 12.5% relative to 2013 levels. Overall US pork produ...

Rapid economic development, expanding populations and rising wages are set to propel Africa to being the fastest growing market for beer, according to a new report from Rabobank, Beer on the Frontier: Opportunities for Brewers in the African Continent. With developed economies still dealing with the fallout of the economic slowdown, and growth in the BRICs having disappointed, global brewers are set to explore the opportunities provided by Africa.

Rabobank expects an easing of global milk pricing from mid to late Q2 2014, according to its Q1 Dairy Quarterly report. Exportable supply rose strongly in Q4 2013 and is expected to continue into early 2014 as producers respond to improved margins through high milk prices and falling feed costs. A strong Northern Hemisphere production season, on the back of an exceptional season in the Southern Hemisphere, should generate more than enough exportable supply to exceed China’s extraordinary addi...

An improvement in the Spanish wine industry’s productive structure and orientation to the international market is necessary for the country to remain globally competitive according to a recent report from Rabobank – La Mancha in the Middle. Recent EU support programmes have improved the efficiency in Spanish wine production, but oversupply remains an issue. There are two strategic options available to Spain to improve its competitive positioning - Spain must either increase production of inte...

A quadrupling in the world’s population in the past 100 years has required a fundamental change in soil and crop management to meet growing food demand globally. In China, the issue of food security is driving the development of a hybrid model and changing the way in which the region will feed itself in the long-term. China’s food security will ultimately rely on the professionalisation of its agricultural system through the infrastructure of research, education, and farm extension services, ...

Wheat consumption is on the rise in Indonesia, driven by economic growth and convenience. Wheat provides an economical and nutritious alternative to rice, and increased consumption could help Indonesia resolve its self-sufficiency target for paddy according to Rabobank’s latest report – The Wheat Opportunity: Growing Indonesian Consumption Driving Imports and Investment. Given the current consumption rate, Indonesia could import more than 10 million tonnes per year in the coming five years, p...

February 2014

Rabobank are bearish on global fertiliser pricing, according to its Q1 Fertiliser Quarterly report. In urea, a temporary imbalance between supply and demand could put further temporary upward pressure on prices. Phosphate demand in Q1 2014 is finding support from speculative buying from the US and Brazil, with prices finding additional support from elevated sulphur prices. However, at the end of this quarter, prices for both phosphates and urea could fall to levels seen before the recent pri...

The dairy industry in Poland provides plenty of investment opportunities to those players who have the right strategy, according to a recent report from Rabobank – Poles Apart. While production has increased at farm level, further investment is needed to realise Poland’s full potential after the removal of production quotas in 2015. At the processor level, consolidation and improvements in efficiency would provide opportunities to tap into domestic and export markets. At the consumer level, d...

Rabobank expects another year of record production for several of Brazil’s major agricultural crops in 2014, including soybeans and, depending on weather developments, sugarcane. However, according to a recent research note, international prices for many of Brazil’s agricultural commodities fell in 2013 and could decline further in 2014. Infrastructure and logistics remains a key point of concern for the country for 2014, particularly for the export market. With production and export volumes ...

Chinese agriculture has grown tremendously over the past thirty-five years and with the new leadership in 2012 and a flurry of new government policies, agriculture is expected to experience even faster growth in the coming decade. According to a recent report from Rabobank – New Chinese Agricultural Policy – new policy adjustments will address balancing the pace of urban and rural development, usher the adoption of mechanisation and new technology in the agricultural system, and facilitate th...

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About Rabobank Food & Agribusiness Research

About Rabobank Group and Rabobank Food & Agribusiness Research and Advisory

Rabobank is a Netherlands based, international financial services provider operating on the basis of cooperative principles. It offers retail banking, wholesale banking, private banking, leasing and real estate services. As a cooperative bank, Rabobank puts customers’ interests first in its services. Rabobank is committed to being a leading customer-focused cooperative bank in the Netherlands and a leading food and agri bank worldwide with assets totalling at 670 billion euro. The organisation has approximately 52,000 employees worldwide and operates in 40 countries.

Rabobank is the unrivalled market leader in the agricultural sector in the Netherlands. Its international strategy Banking for Food is aimed at increasing the availability of food, improving the access to food, promoting healthy nutrition and enhancing the stability of the food industry through its international activities.

Rabobank Food & Agribusiness Research and Advisory (FAR) is Rabobank’s global F&A Knowledge Provider. FAR comprises a global team of more than 80 analysts that continuously accumulates knowledge in major F&A sectors, issues and trends.